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Michigan Embraces New Shrimp Production Method


Published: Friday, April 22, 2011

OKEMOS, Mich. (AP)—To ramp up the automotive industry in Michigan, Henry Ford built the Rouge Plant—a manufacturing infrastructure that could produce everything needed, from glass to steel, to make cars.

Today, Russ Allen is looking for a way to build a shrimp Rouge Plant—a pollution-free, recirculating facility that could breed, grow, process and ship a million pounds of shrimp a year.

It's not as far-fetched as it sounds. Allen, who spent 23 years establishing outdoor shrimp farming in Central and South America, has been raising shrimp indoors in Okemos since 1994 at his Seafood Systems research facility.

He closely guards his proprietary technology from other companies and scientists around the world who also are racing to create the first successful, commercial-sized, indoor shrimp-growing system.

"This could be the start of an entirely new industry for Michigan, a clean industry, with new jobs," he said—if he can find the $10 million he needs to build a commercial plant.

But so far, he's finding it easier to grow shrimp 600 miles from the ocean than to find investors who share his vision for making Michigan an aquaculture leader.

First-time customer Dan McCarthy surveyed the three sizes of shrimp in the refrigerated case at Russ Allen's small farm market and ordered a pound of large ones, plus some cocktail sauce.

"I hope the community is supporting you. I think it's great you're doing this here," said McCarthy of Southfield, who was heading home from Lansing and drove out of his way to find the market in the Okemos countryside.

He first heard about and tasted the Michigan-grown shrimp at a friend's home, McCarthy said, and he wanted to see where they came from. "I believe in supporting local enterprises, anyway," he added.

Allen, who grew the shrimp in his Seafood Systems research facility next door, knows there are potentially millions of customers like McCarthy in Michigan and beyond who eagerly would buy clean, safe, U.S.-grown shrimp if it were widely available at affordable prices.

He's ready to make that happen, he said.

"My goal was to develop the technology to be able to commercially raise shrimp competitively in the United States, and we've done that," he said. Some experts familiar with his work said they believe he's right.

But raising millions of pounds of shrimp indoors is only part of Allen's vision. He said he believes Michigan can become a major center of aquaculture—farming fish, seafood and other aquatic life—just as world demand for seafood skyrockets over the next few decades.

"Michigan has to understand the opportunity it has," Allen said. "We have 20 percent of the world's fresh water—we have the primary resource for aquaculture."

But turning his pilot shrimp project into an industry—at least in Michigan—is proving more difficult than he expected.

There's no doubt about future demand for shrimp. It's America's most-consumed seafood. And because 90 percent of it is imported—often from countries with few health and environmental safeguards—shrimp grown in the U.S. in clean, nonpolluting conditions has obvious appeal. International demand also is growing as populations increase in Asia, where seafood is the preferred protein.

Nor does there seem to be any doubt that Allen can breed and grow marine shrimp indoors, using the contained, re-circulating, nonpolluting system he has developed during 17 years in Okemos.

Laura Tiu, an aquaculture specialist at the Ohio State University Center for Aquaculture Research and Development, said she has seen Allen's proprietary system and called the technology "absolutely amazing" and "definitely workable."

Keith Creagh, director of the Michigan Department of Agriculture and Rural Development, also said he believes Allen's system works and could be commercially viable if done on a large enough scale.

"Russ has done some heavy lifting and really good groundwork on having a viable process to raise shrimp in Michigan," said Creagh, who has known Allen for years and is familiar with his system. "He has shown that, on a small scale, there is capability. Now he has to increase capacity."

Allen's research facility can grow only 300-400 pounds of the critters a week—plenty for direct sales at his market, local farmers markets and a few restaurants, but not enough to supply commercial customers.

To make that possible, Allen said, he needs $10 million, which he has been trying to raise for at least four years.

As an agricultural business, his shrimp farm didn't qualify for grants under the 21st Century Jobs Fund during former Gov. Jennifer Granholm's administration, he said. His only state assistance has been a $200,000 Agriculture Innovation Grant in 2006 to help develop an automated feeding system.

He has not been able to find an acceptable deal from venture capitalists—private parties or groups willing to invest in high-risk businesses.

Allen said he has dealt with 15 to 20 investors from around the country, but either they want too big a piece of the company or they want to begin receiving profits too quickly.

"I want to make sure it's right. ... I want to benefit from it," he said.

Gov. Rick Snyder's administration is showing strong interest in fostering agribusiness, and the state may yet help Allen.

To be considered, Creagh said, Allen will have to complete a feasibility study and write a complete business plan. "State and federal governments don't give grants just on good ideas," the agriculture director said.

Allen said the studies were completed and filed before Creagh's recent appointment.

At 62, Allen, an Adrian native and University of Michigan graduate, is becoming impatient to see his work come to fruition and is talking to Ohio about building his shrimp complex there. The state is actively trying to expand its aquaculture industry, which already has about 170 fish farms, including 25 to 30 outdoor shrimp farms.

Last year, Allen said, Ohio officials offered him a financial package that included land, loan guarantees and help with finding more funds if he would build his shrimp farm there. OSU's Tiu confirmed the state is recruiting Allen and said economic development officials are helping him rewrite his business plan to incorporate their proposal.

Allen's system has a very simple design that could be built anywhere, Tiu said. "If he can make a go of it in Michigan or Ohio, it can be replicated across the whole country and the world."

And it will take production at those levels to satisfy the world's craving for its favorite crustacean.

Michigan could be a player in that and other aquaculture, Allen contended, growing not only shrimp but all kinds of fin fish, from perch and whitefish to rainbow trout and tilapia.

"We can build another empire doing this. It's not the return in the next five years. It's where we're going to be in 20 years."

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